Tesla’s TSLA anticipated “Battery Day” revealed a variety of several modest improvements to battery technology which together promise a significant drop in battery battery cost, moderate increase in battery capacity, and…
As hinted, these improvements are not shipping tomorrow — some are not even in production yet. Nonetheless, EVs are at a point where moderate improvements can push them over a cliff into the zone of competing with and beating gasoline cars on price — they long ago beat them on performance, operating cost and maintenance. After that, the only advantage the gasoline car will have left is less fear on range, and most of that fear is irrational.
Consider that today, while EVs tend to cost more than similar gasoline, they cost so much less to run (cost of energy and maintenance) that they are already competing in total cost of ownership. Even so, car buyers aren’t always fully rational on total cost of ownership, and having reduced up-front cost will make a big difference. Overall, Tesla is predicting:
- A 56% total reduction in cost per kwh of the battery pack — massive.
- A resulting 54% increase in range for the same size pack.
- Significant reduction in footprint of factories and cost of scaling up production — 69% less investment needed
- Silicon anodes with higher capacity
- New cobalt-free anodes, including very high capacity all nickel cathodes
- Major improvements to the processing part of cathode manufacturing
- New sources of immense supplies of Lithium
- Making the structural rear of the car from a single casting
- Making the battery pack a structural element in the car, effectively making it add no weight to the car
- A $25,000 quality EV in 3 years with autonomy capabilitie
Drive-in shareholder’s meeting
Due to Covid, Tesla held their meeting outdoors. Stockholders had to win a lottery to attend in their cars. When Tesla said something the audience liked, they all honked horns instead of applauding.
A 56% total reduction in cost per kwh of the battery pack.
All the various benefits, from better cell design, chemistry and improved manufacturing, add up to a 56% reduction in the cost per kwh of batteries and their pack. Today, the battery pack is the most expensive part of an electric car, so this is the big driver of a cheaper electric car — both a low-end car, and lower prices on the high-end cars. Other car makers will need to work hard to catch up. In the rest of the industry, most makers are on the same footing — if they design a similar car, it costs a similar amount to make. No maker has a giant advantage in how much car they can give for the money. Tesla’s ability to invest heavily in the most important underlying technology is paying off for them, justifying at least part of their ridiculous valuation.
Better capacity cells with no tabs
Tesla’s new 4680 cell design uses an network of internal foils instead of the tab which must be welded to foils and bring energy out of the cell. This will generate a 16% improvement in cells, according to Tesla. They also plan a new process to apply the coatings to the foils, but this is not yet in production.
A resulting 54% increase in range for the same size pack.
Tied to the reduction in cost of making the packs is a claim of increasing energy density. The result is that cars will, for less money, have more range. While the 250-300 mile range of most cars is sufficient for almost all car use, certain vehicles, like trucks, RVs and cars for very long trips want more range. Telsa claims it will deliver that.
Significant reduction in footprint of factories and cost of scaling up production — 69% less investment needed
Much of Tesla’s work has been to streamline their manufacturing processes for cells, cell components, packs and the cars themselves.
Silicon anodes with higher capacity
Silicon is a great anode material (battery cells consist of two materials, known as the anode and cathode, with a barrier between them) but it expands when charged. Tesla has developed new ways to stabilize the silicon and increase range 20%. These methods are not yet in full production.
New cobalt-free anodes, including very high capacity all nickel cathodes
The anode half typically uses cobalt today, which is both expensive and has limited supply — and a lot of the supply is in the Congo. Tesla plans to use a variety of anode designs, some aimed at the most range, others at lower cost, but all free of cobalt.
Major improvements to the processing part of cathode manufacturing
Making cathodes is a complex task, and the materials processing segment is a big part of it. Tesla has worked to reduce that cost, and reduce the cost and footprint of the manufacturing plant to make it.
New sources of immense supplies of Lithium
Lithium is, of course the essential energy transfer element in lithium ion batteries. Tesla has developed a new process to extract lithium from clays, and now calculates that known deposits of lithium in just the state of Nevada can supply all that is needed to electrify the entire US auto fleet.
Making the structural rear of the car from a single casting
Unrelated to batteries, Tesla has developed a new design for the entire rear of their vehicle that can be cast as a single part, reducing vehicle cost and manufacturing cost. This required development of a new aluminum alloy.
Making the battery pack a structural element in the car, effectively making it add no weight to the car
Today, the car is structurally complete and a battery pack is held within the car’s structural frame. Tesla’s new battery pack will also be strong enough to be the structural element of the bottom of the car. This removes the need for structural strength in the sub-packs, and makes the weight of the battery pack now “free” as it’s part of the weight of the car. Musk likened this to a similar development of airplane fuel tanks that are in the shape of wings, and thus are the wings.
A $25,000 quality EV in 3 years with autonomy capabilities
All this progress together makes Tesla predict that in 3 years it will make a consumer electric vehicle at around $25,000 — similar to the new car purchase price of entry level sedans with gasoline power. Tesla predicts — with good reason, that these should overwhelm that segment, as the cars will also be clean and very high performance, as well as much cheaper to operate. Musk predicted there is no future for the existing gasoline based auto industry unless they adopt and electric strategy quickly.
Tesla announced many modest improvements which add up to a big improvement. Some are being built today at small scale. Others still need a bit more engineering which Tesla described as “a lot of work” but “definitely doable.”
One of the reasons for many of the changes is to allow them to scale up to an eventual 20 million cars/year, which would be the largest auto company in the world. By finding ways to reduce the investment and space needed for factories, they can move faster on their growth goals. Musk predicted it would take 12-18 months to start realizing most of the gains announced today, 3 years to more fully realize them.
They predict they will manufacture 100 gwh/year of their new process batteries by 2022, and 3 twh (30x as much) by 2030. Each car uses from 50 to 100kwh.